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Click here for the full text of this decision FACTS:Comptroller Carole Keeton Strayhorn assessed almost $7 million in premium taxes against Lexington Insurance Co., Landmark Insurance Co. and American International Specialty Lines Insurance Co. (collectively, the insurers) for policies issued in the early 1990s. After the insurers proved that most of their policies were procured through surplus lines agents licensed in Texas, the comptroller dropped 70 percent of her claim, recognizing that in such cases the agent rather than the carrier was liable for the taxes. But because the insurers could not prove the same as to the rest of their policies, they paid almost $2 million in premium taxes under protest and sought a refund. HOLDING:Affirmed. The Texas Supreme Court agreed with the insurers that the Texas Insurance Code distinguishes between eligible surplus lines carriers and other unlicensed insurers, and often treats the two quite differently. But the court agreed with the comptroller that when it comes to collecting premium taxes, the Texas Insurance Code treats the two the same if a surplus policy is not placed through a licensed agent. OPINION:Brister, J., delivered the opinion of the court. Jefferson, C.J., did not participate in the decision.

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